How would you like to sit down for one hour with each of the 37 entrepreneurs honored by Ernst and Young at Utah's Entrepreneur of the Year ceremony? What would you ask them? "How did they do it? What's made the difference? To what do they owe their success?"
I would love the opportunity to ask those questions; however, from experience, I know that there would not be one single overriding answer.Some would say the difference is their employees. Others, their spouses. A few would credit their parents. Maybe some would even credit help from their Creator. Still others would honestly answer, "I have no idea." A few might even say they just got lucky.
I believe the real question we should be asking, if given the opportunity, is, "What do you do on a regular basis in your business that I don't do in mine?" If we asked the question in this way, we would discover real, tangible business practices that these men and women use regularly in their companies that have enabled them to build fast-growth entrepreneurial businesses and, in turn, have made themselves millionaires.
While none of us will have the opportunity to interview all 37, may I suggest another approach, that isn't as fun, but will, in fact, be even more valuable than sitting down with these 37.
In essence, I offer you a peek into the business strategies of not 37 Ernst and Young Utah entrepreneurs but into the thinking of more than 900 award winners.
What I have before me is what I consider to be the Bible for fast- growth ventures. It is a little-known booklet called "Leading Practices of Fast Growth Entrepreneurs." Ernst and Young researchers have picked the brains of more than 900 award-winners from all around the country in the form of a comprehensive survey.
As a result, we have the thinking of these entrepreneurs on what they have done to create and sustain their fast-growth companies in marketing, finance, managing and planning.
Here is the score card, pattern or template of the best practices of these fast-growth firms, which average 28 percent growth per year.
Missing from the booklet are trite questions such as, "Are entrepreneurs born or made?" No hocus-pocus stuff here. It is all about what winning entrepreneurs do.
Here are definitive answers to hard concrete questions presented in a general framework through which you can measure and compare your performance.
Let's look at marketing first. Growth of the magnitude of these companies is sustained only one way - very competent marketing - by employees who fully understand the mechanics of getting and keeping customers.
The strategy that seems to lead out consistently is not low-cost pricing.
No, for 65 percent of these successful entrepreneurs, it is the high quality of their product that beats the competitor every time. Today, high quality is a requirement and not a choice, and the customer seems willing to pay for it. The adage that you get what you pay for seems to be believed by enough people that industry leaders price their products accordingly. At least 79 percent of these leaders did.
Another strong marketing strategy among the 900 is the value of "first to market" thinking. Get in front of the market with your prod-uct and services and stay there, and your company is going to be high growth. If you only manage to keep in step with your competitors, you will understand what the Eskimo dog sledder means when he says, "If you aren't the lead dog, the view never changes."
Sure we know the cliches about the dangers of being first to market or of being the pioneers - the ones with the arrows in the back - but this research shows that even a few arrows aren't fatal. In fact, being out front with new products time after time is more like being the first to a gold field in a gold rush - you can stake your claim to the big nuggets.
What about the product and services mix between existing and new ones? These award-winning entrepreneurs have found that while they need to keep developing something new to get the bump by being first to market, the majority of the most profitable sales are attributed to the existing products sold repeatedly to their current customer base. This research shows that for high-growth companies, more than 70 percent of the revenue comes from that "old customer" who has purchased from you for at least one year.
Sales pros know that it costs a lot less and therefore is a lot more profitable to keep an old customer coming back that it is to go out and get new ones all the time.
Among the leading financial practices discussed are multiple rounds of financing, sources of growth capital and exit strategies. Again, the inside thinking of these successful entrepreneurs on employee ownership and control of voting shares is charted, graphed and illustrated in table after table in this entrepreneurial treasure.
In the leading management practices of fast growth-firms, the decision-making styles and development of top management teams are outlined as well as how these industry leaders view boards of directors. Perhaps surprising to some will be the extent to which these entrepreneurs rely on input from the board for strategic decisions involving a firm's growth trajectory.
Conventional wisdom might indicate that entrepreneurs are not good planners but instead rely heavily on "shooting from the hip." While that may be true of the average entrepreneur, these winners are neither average nor hip-shooters.
Seventy-nine percent have written plans yet remain organizationally agile enough to take advantage of the many promising yet turbulent opportunities that face fast-growth firms. Perhaps surprising but self-fulfilling is the fact that of the 79 percent that have written plans, 87 percent of those share planned performance vs. actual performance data with their employees.
If I were ever to launch another high performance venture, I would want to read, underline, dissect, consume and digest this priceless Bible of Entrepreneurial success.
Now here is an offer you can't refuse. In the next week, either e-mail or fax to me a request with your mailing address, and Ernst and Young and I will send to you one of these ground-breaking book-lets.
As far as I am concerned, monthly monitoring by you, your management team and board of directors on how close you are following these strategies will go a long way in getting you to the podium in the years to come at the Entrepreneur of the Year award ceremonies.
It just that simple - do what the leaders do, and you will greatly increase the odds of becoming a high-performance entrepreneur yourself.